I’ve spent a good amount of time developing an understanding the journey of emerging investment managers. These are people who want to start a company that focuses on making money by investing capital. Many people think of emerging VC fund managers, but it can include anyone investing other people’s capital such as private equity and real estate fund managers. I think of these people as entrepreneurs who happen to be investors, or “investor entrepreneurs.” They want to invest as their profession, but not by working for someone else. They want to create their own investing company and work for themselves.  

These investor entrepreneurs are no different from any other founder. The journey and struggle are the same; the details vary a bit because of the industry and business model.

Most great founders have a unique insight. They understand a problem well, seeing something about it that others have missed. This observation is their unique insight; it gives them an edge in developing a solution that creates real value for potential customers.  

To be successful, investor entrepreneurs need the equivalent. They need to understand and see an investing opportunity that others don’t understand, have overlooked, or aren’t aware of. They need to understand how they can generate superior returns because of this insight. This unique insight is their investing edge, their investment thesis.

A founder with a clear, unique insight, a solution based on that insight, and the ability to execute has a higher probability of success and of raising capital from VC funds. An investor entrepreneur with a clear investment thesis, a strategy to generate superior returns based on that investment thesis, and the ability to execute that strategy has a higher probability of success and of raising capital to invest from limited partners.